Brinker Capital Inc. sees a real opportunity in the defined contribution market by offering a bundled managed account-only 401(k) plan — a product only a handful of providers currently offer.
Brinker Capital, with $5 billion in assets under management in managed accounts and mutual funds, has linked with record keeper Professional Capital Services LLC, Philadelphia, to offer a bundled product with record keeping, education, and managed account-only investment management through financial advisers. This is Brinker Capital's first product designed for the DC industry.
John Ring, Brinker'smanaging director of retirement plan services, said "participants are dazed and confused with asset allocation," and there is a need for a bundled managed-account product.
"There has been a shift in the industry from DIY (do it yourself) to participants wanting it done for them," said Mr. Ring.
Rick Meigs, founder of 401khelpcenter.com, a 401(k) information web site based in Portland, Ore., said there is solid demand for a bundled managed account product as plan sponsors want to address poor asset allocation decisions. "It was a difficult sell at first, but since the bear market, there has been a rise of lifestyle funds, target-date funds and managed portfolios," he said.
"It's definitely a niche, but it's a niche that's getting some good attention. The vast majority of 401(k)s will still offer the traditional 10 to 15 options, but more are looking for a managed type of supplement," said Mr. Meigs.
He noted other providers that have a similar option include Invesmart Advisors Inc., Pittsburgh, and Fidelity Investments, Boston.